Clegg looks to hit rich quick with wealth tax

Nick Clegg has called for a fresh wealth tax to "hardwire fairness" into Britain, but George Osborne has already poured cold water on his proposals.

The deputy prime minister's call is his first major attempt at policy differentiation between the Liberal Democrats and Conservatives, setting up the prospect of intense hostility between the parties' grassroots in the looming party conference season.

Clegg's proposal is to target those with high asset wealth rather than income, which is likely to remain taxed at 45% for some time to come. Details will be provided in a policy motion at the Lib Dem conference in Brighton.

"This is the time when we can start spreading our wings more," the Lib Dem leader told the Guardian newspaper.

"The action is making sure that very high asset wealth is reflected in the tax system in the way that it isn't now, making sure that we continue to crack down very hard on tax avoidance, making sure that tax breaks don't go disproportionately to people at the very top."

The Lib Dems have already pushed for a 'mansion tax' which critics say unfairly punishes those with high property values in the south-east of England. Their demands led to the 2012 Budget including an increase in stamp duty to seven per cent for homes worth over £2 million.

Now Clegg wants to go even further with a "time-limited contribution" from "people of considerable wealth".

"If we want to remain cohesive and prosperous as a society, people of very considerable personal wealth have got to make a bit of an extra contribution," he added.

"What we are embarked on is in some senses a longer economic war rather than a short economic battle."

His comments prompted a hostile response from the chancellor, whose comments have confirmed the growing divide at the top of the coalition.

"I am clear that the wealthy should pay more which is why in the recent budget I increased the tax on very expensive property transactions," Osborne said.

"But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

Shadow Treasury minister Chris Leslie said Clegg was "taking the British people for fools" because of the Budget's reduction in the top rate of income tax from 50% - a move Labour has labelled a "tax cut for millionaires".

"He has supported a failing economic plan which has pushed Britain into a double-dip recession and is leading to borrowing going up by a quarter so far this year," Leslie added.

Since forming the coalition in 2010 the coalition has been forced to accept its already harsh austerity plans will have to be extended long beyond 2015.

"If we are going to ask people for more sacrifices over a longer period of time, a longer period of belt tightening as a country, then we just have to make sure that people see it is being done as fairly and as progressively as possible," Clegg said.

"While I am proud of some of the things we have done as a government I actually think we need to really hardwire fairness into what we do in the next phases of fiscal restraint.

"If we don't do that I don't think the process will be either socially or politically sustainable or acceptable."